Prospectus. Polaris II A-Class. May2,2016. Polaris Variable Annuities are issued by American General Life Insurance Company.

Transcription

1 Polaris II A-Class Prospectus May2,2016 Polaris Variable Annuities are issued by American General Life Insurance Company. The Privacy Notice is printed at the end of this document. The Privacy Notice is not part of this prospectus.

2 SUPPLEMENT TO THE VARIABLE ANNUITY PROSPECTUS DATED MAY 2, 2016 AMERICAN GENERAL LIFE INSURANCE COMPANY VARIABLE SEPARATE ACCOUNT Polaris Variable Annuity Polaris Choice II Variable Annuity Polaris Choice III Variable Annuity Polaris II Variable Annuity Polaris Platinum Variable Annuity Polaris Platinum II Variable Annuity Polaris Preferred Solution Variable Annuity VARIABLE ANNUITY ACCOUNT FOUR Anchor Advisor Variable Annuity VARIABLE ANNUITY ACCOUNT SEVEN Polaris II A-Class Platinum Series Variable Annuity Polaris II A-Class Variable Annuity THE UNITED STATES LIFE INSURANCE COMPANY IN THE CITY OF NEW YORK FS VARIABLE SEPARATE ACCOUNT Polaris Preferred Solution Variable Annuity Effective on or about June 30, 2016, the SunAmerica Series Trust SA Marsico Focused Growth Portfolio changed its name to SA Janus Focused Growth Portfolio, and its investment manager changed from Marsico Capital Management, LLC to Janus Capital Management, LLC. Accordingly, all references in the prospectuses to the SA Marsico Focused Growth Portfolio and to its manager, Marsico Capital Management, LLC are respectively replaced with the SA Janus Focused Growth Portfolio and Janus Capital Management, LLC. Underlying Fund: Managed by: Trust Asset Class SA Janus Focused Growth Janus Capital Management, LLC SAST STOCK Dated: June 30, 2016 Please keep this Supplement with your Prospectus S-3865-IN1.3 (06/16)

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4 Prospectus May 2, 2016 FLEXIBLE PREMIUM DEFERRED VARIABLE ANNUITY CONTRACT issued by Depositor AMERICAN GENERAL LIFE INSURANCE COMPANY in connection with VARIABLE ANNUITY ACCOUNT SEVEN This variable annuity has several investment choices Variable Portfolios (which are subaccounts of the Separate Account) and Fixed Account options. Each Variable Portfolio invests exclusively in shares of one of the Underlying Funds listed below. The Underlying Funds are part of the AIM Variable Insurance Funds (Invesco Variable Insurance Funds), American Funds Insurance Series, Anchor Series Trust, Lord Abbett Series Fund, Inc. and SunAmerica Series Trust. UNDERLYING FUNDS: Managed by: Aggressive Growth Wells Capital Management Incorporated American Funds Asset Allocation Capital Research and Management Company American Funds Global Growth Capital Research and Management Company American Funds Growth Capital Research and Management Company American Funds Growth-Income Capital Research and Management Company Asset Allocation Edge Asset Management, Inc. Balanced J.P. Morgan Investment Management Inc. Blue Chip Growth Massachusetts Financial Services Company Capital Appreciation Wellington Management Company LLP Capital Growth The Boston Company Asset Management, LLC Corporate Bond Federated Investment Management Company Dogs of Wall Street SunAmerica Asset Management, LLC Emerging Markets J.P. Morgan Investment Management Inc. Equity Opportunities OppenheimerFunds, Inc. Fundamental Growth Wells Capital Management Incorporated Global Bond Goldman Sachs Asset Management International Global Equities J.P. Morgan Investment Management Inc. Government and Quality Bond Wellington Management Company LLP Growth Opportunities Invesco Advisers, Inc. Growth Wellington Management Company LLP Growth-Income J.P. Morgan Investment Management Inc. High-Yield Bond PineBridge Investments LLC International Diversified Equities Morgan Stanley Investment Management, Inc. International Growth & Income Putnam Investment Management, LLC Invesco V.I. American Franchise Fund, Series II Shares Invesco Advisers, Inc. Invesco V.I. Comstock Fund, Series II Shares Invesco Advisers, Inc. Invesco V.I. Growth and Income Fund, Series II Shares Invesco Advisers, Inc. Lord Abbett Growth and Income Lord, Abbett & Co. LLC Lord Abbett Mid Cap Stock Lord, Abbett & Co. LLC Mid-Cap Growth J.P. Morgan Investment Management Inc. Real Estate FIAM LLC 1 SA AB Growth AllianceBernstein L.P. SA JPMorgan MFS Core Bond J.P. Morgan Investment Management Inc. and Massachusetts Financial Services Company SA Legg Mason BW Large Cap Value Portfolio 2 Brandywine Global Investment Management, LLC 2 SA MFS Massachusetts Investors Trust Massachusetts Financial Services Company SA MFS Total Return Massachusetts Financial Services Company Technology Columbia Management Investment Advisers, LLC Telecom Utility Massachusetts Financial Services Company Ultra Short Bond Portfolio 3 Dimensional Fund Advisors LP 3 This contract is no longer available for purchase by new contract owners. 1 On December 10, 2015, the investment manager Pyramis Global Advisors, LLC was renamed FIAM LLC. 2 On September 8, 2015, the Davis Venture Value Portfolio was renamed SA Legg Mason BW Large Cap Value Portfolio and the investment adviser changed from Davis Selected Advisers, LP to Brandywine Global Investment Management, LLC. 3 On May 2, 2016, the Cash Management Portfolio changed to the Ultra Short Bond Portfolio and the investment manager changed from BofA Advisors, LLC to Dimensional Fund Advisors LP.

5 Please read this prospectus carefully before investing and keep it for future reference. It contains important information about the variable annuity, including a description of all material features of the contract. If you are considering funding a tax-qualified retirement plan (e.g., IRAs, 401k or 403b plans) with an annuity, you should know that an annuity does not provide any additional tax deferral treatment of earnings beyond the treatment provided by the tax-qualified plan itself. You should fully discuss this decision with your financial representative. To learn more about the annuity offered in this prospectus, you can obtain a copy of the Statement of Additional Information ( SAI ) dated May 2, The SAI has been filed with the United States Securities and Exchange Commission ( SEC ) and is incorporated by reference into this prospectus. The Table of Contents of the SAI appears at the end of this prospectus. For a free copy of the SAI, call us at (800) or write to us at our Annuity Service Center, P.O. Box 15570, Amarillo, Texas In addition, the SEC maintains a website ( that contains the SAI, materials incorporated by reference and other information filed electronically with the SEC by the Company. Variable Annuities involve risks, including possible loss of principal, and are not a deposit or obligation of, or guaranteed or endorsed by, any bank. They are not federally insured by the Federal Deposit Insurance Corporation, the Federal Reserve Board or any other agency. These securities have not been approved or disapproved by the SEC, nor any state securities commission, nor has the SEC passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense.

6 TABLE OF CONTENTS GLOSSARY... 3 HIGHLIGHTS... 4 FEE TABLE... 5 Maximum Owner Transaction Expenses... 5 Contract Maintenance Fee... 5 Separate Account Annual Expenses... 5 Total Annual Portfolio Operating Expenses... 5 MAXIMUM AND MINIMUM EXPENSE EXAMPLES... 6 THE POLARIS II A-CLASS VARIABLE ANNUITY... 7 PURCHASING A POLARIS II A-CLASS VARIABLE ANNUITY... 7 Allocation of Purchase Payments... 8 Accumulation Units... 9 Right to Examine... 9 Exchange Offers... 9 Important Information for Military Servicemembers.. 10 INVESTMENT OPTIONS Variable Portfolios AIM Variable Insurance Funds (Invesco Variable Insurance Funds) American Funds Insurance Series Lord Abbett Series Fund, Inc Anchor Series Trust SunAmerica Series Trust Substitution, Addition or Deletion of Variable Portfolios Fixed Accounts Dollar Cost Averaging Fixed Accounts Dollar Cost Averaging Program Asset Allocation Program Transfers During the Accumulation Phase Automatic Asset Rebalancing Program Return Plus Program Voting Rights ACCESS TO YOUR MONEY Systematic Withdrawal Program Minimum Contract Value Qualified Contract Owners DEATH BENEFIT Death Benefit Defined Terms Death Benefit Options Optional EstatePlus Benefit Spousal Continuation EXPENSES Separate Account Expenses Underlying Fund Expenses Transfer Fee Optional EstatePlus Fee Premium Tax Income Taxes Reduction or Elimination of Fees, Expenses and Additional Amounts Credited PAYMENTS IN CONNECTION WITH DISTRIBUTION OF THE CONTRACT ANNUITY INCOME OPTIONS The Income Phase Annuity Income Options Fixed or Variable Annuity Income Payments Annuity Income Payments Transfers During the Income Phase Deferment of Payments The Income Protector Feature TAXES Annuity Contracts in General Tax Treatment of Distributions Non-Qualified Contracts Tax Treatment of Distributions Qualified Contracts. 33 Required Minimum Distributions Tax Treatment of Death Benefits Contracts Owned by a Trust or Corporation Foreign Account Tax Compliance ( FATCA ) Other Withholding Tax Gifts, Pledges and/or Assignments of a Contract Diversification and Investor Control OTHER INFORMATION The Distributor The Company The Separate Account The General Account Guarantee of Insurance Obligations Financial Statements Administration Legal Proceedings Registration Statements CONTENTS OF STATEMENT OF ADDITIONAL INFORMATION APPENDIX A CONDENSED FINANCIAL INFORMATION..A-1 APPENDIX B DEATH BENEFITS FOLLOWING SPOUSAL CONTINUATION...B-1 APPENDIX C MARKET VALUE ADJUSTMENT ( MVA )..C-1 APPENDIX D HYPOTHETICAL EXAMPLE OF THE OPERATION OF THE INCOME PROTECTOR FEATURE..D-1 APPENDIX E STATE CONTRACT AVAILABILITY AND/OR VARIABILITY...E-1 2

7 GLOSSARY We have capitalized some of the technical terms used in this prospectus. To help you understand these terms, we have defined them in this glossary. Accumulation Phase - The period during which you invest money in your contract. Accumulation Units - A measurement we use to calculate the value of the variable portion of your contract during the Accumulation Phase. Annuitant - The person on whose life we base annuity income payments after you begin the Income Phase. Annuity Date - The date you select on which annuity income payments begin. Annuity Units - A measurement we use to calculate the amount of annuity income payments you receive from the variable portion of your contract during the Income Phase. Beneficiary - The person you designate to receive any benefits under the contract if you or, in the case of a non-natural Owner, the Annuitant dies. If your contract is jointly owned, you and the joint Owner are each other s primary Beneficiary. Company - Refers to American General Life Insurance Company ( AGL ). The term we, us and our are also used to identify the issuing Company. Continuation Contribution - An amount by which the death benefit that would have been paid to the spousal Beneficiary upon the death of the original Owner exceeds the contract value as of the Good Order date. We will contribute this amount, if any, to the contract value upon spousal continuation. Continuing Spouse - Spouse of original contract owner at the time of death who elects to continue the contract after the death of the original contract owner. Fixed Account - An account, if available, in which you may invest money and earn a fixed rate of return. Fixed Accounts are obligations of the General Account. General Account - The Company s account, which includes any amounts you have allocated to available Fixed Accounts, including any interest credited thereon, and amounts owed under your contract for death and/or living benefits which are in excess of portions of contract value allocated to the Variable Portfolios. Good Order - Fully and accurately completed forms, which are valid, including any necessary supplementary documentation, applicable to any given transaction or request received by us. Gross Purchase Payments - The money you give us to buy the contract, as well as any additional money you give us to invest in the contract after you own it. Gross Purchase Payments do not reflect the reduction of the sales charge. Income Phase - The period upon annuitization during which we make annuity income payments to you. Insurable Interest - Evidence that the Owner(s), Annuitant(s) or Beneficiary(ies) will suffer a financial loss at the death of the life that triggers the death benefit. Generally, we consider an interest insurable if a familial relationship and/or an economic interest exists. A familial relationship generally includes those persons related by blood or by law. An economic interest exists when the Owner has a lawful and substantial economic interest in having the life, health or bodily safety of the insured life preserved. Latest Annuity Date - For contracts issued prior to January 1, 2001, the Latest Annuity Date is defined as the first NYSE business day of the month following your 90th birthday or 10 years after your contract issue date, whichever is later. For contracts issued on or after January 1, 2001, your Latest Annuity Date is defined as the first NYSE business day of the month following your 95th birthday or 10 years after your contract issue date, whichever is later. Market Close - The close of the New York Stock Exchange, usually at 1:00 p.m. Pacific Time. Non-Qualified (contract) - A contract purchased with after-tax dollars. In general, these contracts are not under any pension plan, specially sponsored program or individual retirement account ( IRA ). NYSE - New York Stock Exchange Owner - The person or entity (if a non-natural owner) with an interest or title to this contract. The term you or your are also used to identify the Owner. Purchase Payments - The portion of your Gross Purchase Payments which we invest in your contract. We calculate this amount by deducting the applicable sales charge from your Gross Purchase Payments. Qualified (contract) - A contract purchased with pretax dollars. These contracts are generally purchased under a pension plan, specially sponsored program or IRA. Separate Account - A segregated asset account maintained by the Company separately from the Company s General Account. The Separate Account consists of Variable Portfolios or subaccounts, each investing in shares of the Underlying Funds. Trusts - Collectively refers to the AIM Variable Insurance Funds (Invesco Variable Insurance Funds), American Funds Insurance Series, Anchor Series Trust, Lord Abbett Series Fund, Inc., and SunAmerica Series Trust. Underlying Funds - The underlying investment portfolios of the Trusts in which the Variable Portfolios invest. Variable Portfolio(s) - The variable investment options available under the contract. Each Variable Portfolio, which is a subaccount of the Separate Account, invests in shares of one of the Underlying Funds. Each Underlying Fund has its own investment objective. 3

8 HIGHLIGHTS The Polaris II A-Class Variable Annuity is a contract between you and the Company. It is designed to help you invest on a tax-deferred basis and meet long-term financial goals. There are minimum Purchase Payment amounts required to purchase a contract. Purchase Payments may be invested in a variety of Variable Portfolios and Fixed Accounts, if available. Like all deferred annuities, the contract has an Accumulation Phase and an Income Phase. During the Accumulation Phase, you invest money in your contract. The Income Phase begins when you start receiving annuity income payments from your annuity to help provide for your retirement. Right to Examine: You may cancel your contract within 10 days after receiving it (or whatever period is required in your state). You will receive whatever your contract is worth on the day that we receive your request plus any sales charges we deducted. The amount refunded may be more or less than your original Gross Purchase Payment. We will return your original Purchase Payment if required by state law. Please see PURCHASING A POLARIS II A-CLASS VARIABLE ANNUITY in the prospectus. Expenses: There are fees and charges associated with the contract. We deduct separate account charges which equal 0.85% annually of the average daily value of your contract allocated to the Variable Portfolios. There are investment charges on amounts invested in the Variable Portfolios including 12b-1 fees of up to 0.25%. If you elect optional features available under the contract, we may charge additional fees for those features. We apply an up-front sales charge against Gross Purchase Payments you make to your contract. The sales charge equals a percentage of each Gross Purchase Payment and varies with your investment amount. Please see the FEE TABLE, PURCHASING A POLARIS II A-CLASS VARIABLE ANNUITY and EXPENSES in the prospectus. Access to Your Money: You may withdraw money from your contract during the Accumulation Phase. If you make a withdrawal, earnings are deemed to be withdrawn first. You will pay income taxes on earnings and untaxed contributions when you withdraw them. Annuity income payments received during the Income Phase are considered partly a return of your original investment. A federal tax penalty may apply if you make withdrawals before age 59½. Please see ACCESS TO YOUR MONEY and TAXES in the prospectus. Death Benefit: A death benefit feature is available under the contract which is payable to your Beneficiaries in the event of your death during the Accumulation Phase. Please see DEATH BENEFITS in the prospectus. Annuity Income Options: When you switch to the Income Phase, you can choose to receive annuity income payments on a variable basis, fixed basis or a combination of both. You may also choose from five different annuity income options, including an option for annuity income that you cannot outlive. Please see ANNUITY INCOME OPTIONS in the prospectus. Inquiries: If you have questions about your contract, call your financial representative or contact us at Annuity Service Center, P.O. Box 15570, Amarillo, Texas Telephone Number: (800) and website ( Please see ALLOCATION OF PURCHASE PAYMENTS in the prospectus for the address to which you must send Purchase Payments. All material state variations are described in Appendix E STATE CONTRACT AVAILABILITY AND/OR VARIABILITY. The Company offers several different variable annuity contracts to meet the diverse needs of our investors. Our contracts may provide different features, benefits, programs and investment options offered at different fees and expenses. When working with your financial representative to determine the best product to meet your needs, you should consider among other things, whether the features of this contract and the related fees provide the most appropriate package to help you meet your retirement savings goals. If you would like information regarding how money is shared among our business partners, including broker-dealers through which you may purchase a variable annuity and received from certain investment advisers of the Underlying Funds, please see PAYMENTS IN CONNECTION WITH DISTRIBUTION OF THE CONTRACT below. Please read the prospectus carefully for more detailed information regarding these and other features and benefits of the contract, as well as the risks of investing. 4

9 FEE TABLE The following information describes the fees and expenses that you will pay when buying, owning, and surrendering the contract. The Maximum Owner Transaction Expenses describe the fees and expenses that you will pay at the time that you buy or surrender the contract, or transfer contract value between investment options. MAXIMUM OWNER TRANSACTION EXPENSES Maximum Sales Charge (as a percentage of each Gross Purchase Payment) % Transfer Fee $25 per transfer after the first 15 transfers in any contract year. Premium Tax % The following describes the fees and expenses that you may pay periodically during the time that you own the contract, not including Underlying Fund expenses which are outlined in the next section. Contract Maintenance Fee... None Separate Account Annual Expenses (deducted from the average daily ending net asset value allocated to the Variable Portfolios) Mortality and Expense Risk Fees % Distribution Expense Charge % Optional EstatePlus Fee % Total Separate Account Annual Expenses % TOTAL ANNUAL PORTFOLIO OPERATING EXPENSES (as of January 31, 2016) The following shows the minimum and maximum total operating expenses charged by the Underlying Funds of the Trusts, before any waivers or reimbursements that you may pay periodically during the time that you own the contract. More detail concerning the Underlying Funds expenses is contained in the prospectus for each of the Trusts. Please read them carefully before investing. Total Annual Portfolio Operating Expenses Minimum 4 Maximum 4 (expenses that are deducted from Underlying Fund assets, including management fees, other expenses and 12b-1 fees, if applicable) % 1.26% Footnotes to the Fee Table: 1 Your Gross Purchase Payment may qualify for a reduced sales charge. Please see EXPENSES section below. Investment Amount (as defined in Sales Charge section) Sales Charge as a Percentage of Gross Purchase Payment Invested Less than $50, % $50,000 but less than $100, % $100,000 but less than $250, % $250,000 but less than $500, % $500,000 but less than $1,000, % $1,000,000 or more % A withdrawal charge of 0.50% applies only to Gross Purchase Payment(s) that qualify for the $1,000,000 or more Investment Amount level, if the Gross Purchase Payment(s) are invested less than 12 months at the time of withdrawal. 2 If applicable, state premium taxes of up to 3.5% may also be deducted when you begin the Income Phase. Please see PREMIUM TAX and Appendix E STATE CONTRACT AVAILABILITY AND/OR VARIABILITY. 3 EstatePlus is an optional earnings enhancement death benefit. If you do not elect the EstatePlus feature, your total separate account annual expenses would be 0.85%. This feature is not available on contracts issued in Washington. If you purchased your contract prior to May 1, 2009, you may have elected EstatePlus which is no longer being offered. 4 The maximum expense is for an Underlying Fund of Lord Abbett Series Fund, Inc., as of its fiscal year ended December 31, The minimum expense is for an Underlying Fund of SunAmerica Series Trust as of its fiscal year ended January 31,

10 MAXIMUM AND MINIMUM EXPENSE EXAMPLES These examples are intended to help you compare the cost of investing in the contract with the cost of investing in other variable annuity contracts. These costs include owner transaction expenses, the contract maintenance fee if any, separate account annual expenses, available optional feature fees and Underlying Fund expenses. The examples assume that you invest $10,000 in the contract for the time periods indicated; that your investment has a 5% return each year; and you incur the maximum or minimum fees and expenses of the Underlying Fund as indicated in the examples. Although your actual costs may be higher or lower, based on these assumptions, your costs at the end of the stated period would be the amounts set forth in the tables below. MAXIMUM EXPENSE EXAMPLES (assuming maximum separate account annual expenses of 1.10% (including EstatePlus) and investment in an Underlying Fund with total expenses of 1.26%) (1) If you surrender your contract at the end of the applicable time period: 1 year 3 years 5 years 10 years $800 $1,269 $1,763 $3,116 (2) If you do not surrender or if you annuitize your contract at the end of the applicable time period: 1 year 3 years 5 years 10 years $800 $1,269 $1,763 $3,116 MINIMUM EXPENSE EXAMPLES (assuming minimum separate account annual expenses of 0.85%, no election of optional features and investment in an Underlying Fund with total expenses of 0.53%) (1) If you surrender your contract at the end of the applicable time: 1 year 3 years 5 years 10 years $707 $987 $1,287 $2,137 (2) If you do not surrender or if you annuitize your contract at the end of the applicable time period: 1 year 3 years 5 years 10 years $707 $987 $1,287 $2,137 Explanation of Expense Examples 1. The purpose of the Expense Examples is to show you the various expenses you would incur directly and indirectly by investing in the variable annuity contract. The Expense Examples represent both fees of the separate account as well as the maximum and minimum total annual Underlying Fund operating expenses. Additional information on the Underlying Fund fees can be found in the Trust prospectuses. 2. In addition to the stated assumptions, the Examples also assume separate account charges as indicated and that no transfer fees were imposed. A maximum sales charge of 5.75% is used in both the maximum and minimum examples because of the $10,000 investment amount. Your expenses may be lower if you are subject to a lower sales charge. Although premium taxes may apply in certain states, they are not reflected in the Examples. 3. If you elected optional features, you do not pay fees for optional features once you begin the Income Phase (annuitize your contract); therefore, your expenses will be lower than those shown here. Please see ANNUITY INCOME OPTIONS below. These examples should not be considered a representation of past or future expenses. Actual expenses may be greater or less than those shown. CONDENSED FINANCIAL INFORMATION APPEARS IN THE CONDENSED FINANCIAL INFORMATION APPENDIX OF THIS PROSPECTUS. 6

11 THE POLARIS II A-CLASS VARIABLE ANNUITY When you purchase a variable annuity, a contract exists between you and the Company. You are the Owner of the contract. The contract provides several main benefits: Death Benefit: If you die during the Accumulation Phase, the Company pays a death benefit to your Beneficiary. Guaranteed Income: Once you begin the Income Phase, you receive a stream of annuity income payments for your lifetime, or another available period you select. Tax Deferral: This means that you do not pay taxes on your earnings from the contract until you withdraw them. Tax-qualified retirement plans (e.g., IRAs, 401(k) or 403(b) plans) defer payment of taxes on earnings until withdrawal. If you are considering funding a tax-qualified retirement plan with an annuity, you should know that an annuity does not provide any additional tax deferral treatment of earnings beyond the treatment provided by the tax-qualified retirement plan itself. However, annuities do provide other insurance features and benefits, which may be valuable to you. You should fully discuss this decision with your financial representative. This variable annuity was developed to help you plan for your retirement. In the Accumulation Phase, it can help you build assets on a tax-deferred basis. In the Income Phase, it can provide you with guaranteed income through annuity income payments. The contract is called a variable annuity because it allows you to invest in Variable Portfolios which, like mutual funds, have different investment objectives and performance. You can gain or lose money if you invest in these Variable Portfolios. The amount of money you accumulate in your contract depends on the performance of the Variable Portfolios in which you invest. Fixed Accounts, if available, earn interest at a rate set and guaranteed by the Company. If you allocate money to an available Fixed Account, the amount of money that accumulates in the contract depends on the total interest credited to the particular Fixed Account in which you invest. For more information on investment options available under this contract, please see INVESTMENT OPTIONS below. As a function of the Internal Revenue Code ( IRC ), you may be assessed a 10% federal tax penalty on any withdrawal made prior to your reaching age 59½. Please see TAXES below. PURCHASING A POLARIS II A-CLASS VARIABLE ANNUITY An initial Gross Purchase Payment is the money you give us to buy a contract. Any additional money you give us to invest in the contract after purchase is a subsequent Gross Purchase Payment. The following chart shows the minimum initial and subsequent Gross Purchase Payments permitted under your contract. These amounts depend upon whether a contract is Qualified or Non-Qualified for tax purposes. For further explanation, please see TAXES below. Minimum Initial Gross Purchase Payment Minimum Subsequent Gross Purchase Payment Minimum Automatic Subsequent Gross Purchase Payment Qualified $2,000 $250 $100 Non-Qualified $5,000 $500 $100 We reserve the right to refuse any Gross Purchase Payment. Furthermore, we reserve the right to require Company approval prior to accepting Gross Purchase Payments greater than $1,500,000. For contracts owned by a non-natural owner, we reserve the right to require prior Company approval to accept any Gross Purchase Payment. Gross Purchase Payments that would cause total Gross Purchase Payments in all contracts issued by the Company or its affiliate, The United States Life Insurance Company in the City of New York, to the same Owner and/or Annuitant to exceed these limits may also be subject to Company pre-approval. The terms creating any limit on the maximum death or living benefit payable would be mutually agreed upon in writing by you and the Company prior to purchasing the contract. Non-Natural Ownership A trust, corporation or other non-natural entity may only purchase this contract if such entity has sufficiently demonstrated an Insurable Interest in the Annuitant selected. For more information on non-natural ownership, please see TAXES below. Various considerations may apply with respect to non-natural ownership of this contract including but not limited to estate planning, tax consequences and the propriety of this contract as an investment consistent with a non-natural Owner s organizational documentation. You should consult with your tax and/or legal advisor in connection with non-natural ownership of this contract. Maximum Issue Age We will not issue a contract to anyone age 86 or older on the contract issue date. We will not accept subsequent Gross Purchase Payments from contract owners age 86 or older. In general, we will not issue a Qualified contract to anyone 7

12 who is age 70½ or older, unless it is shown that the minimum distribution required by the IRS is being made. Please see TAXES below. If we learn of a misstatement of age, we reserve the right to fully pursue our remedies including termination of the contract and/or revocation of any age-driven benefits. Termination of the Contract for Misstatement and/or Fraud The Company reserves the right to terminate the contract at any time if it discovers a misstatement or fraudulent representation of any information provided in connection with the issuance or ongoing administration of the contract. Joint Ownership We allow this contract to be jointly owned by spouses (as determined for federal tax law purposes). The age of the older Owner is used to determine the availability of most age driven benefits. The addition of a joint Owner after the contract has been issued is contingent upon prior review and approval by the Company. Certain states require that the benefits and features of the contract be made available to domestic or civil union partners ( Domestic Partners ) who qualify for treatment as, or are equal to, spouses under state law. There are also states that require us to issue the contract to non-spousal joint Owners. However, non-spousal joint Owners (which can include Domestic Partners) who jointly own or are Beneficiaries of a contract should consult with their tax adviser and/or financial representative as, under current tax law, they are not eligible for spousal continuation of the contract. Therefore, the ability of such non-spousal joint Owners to fully benefit from certain benefits and features of the contract, such as optional living benefit(s), if applicable, that guarantee withdrawals over two lifetimes may be limited. Assignment of the Contract/Change of Ownership You may assign this contract before beginning the Income Phase by sending a written request to us at the Annuity Service Center for an assignment. Your rights and those of any other person with rights under this contract will be subject to the assignment. We will not be bound by any assignment until written notice is processed by us at our Annuity Service Center and you have received confirmation. We are not responsible for the validity, tax or other legal consequences of any assignment. An assignment will not affect any payments we may make or actions we may take before we receive notice of the assignment. We reserve the right not to recognize any assignment if it changes the risk profile of the owner of the contract, as determined in our sole discretion, if no Insurable Interest exists or if not permitted by the Internal Revenue Code. Please see the Statement of Additional Information for details on the tax consequences of an assignment. You should consult a qualified tax adviser before assigning the contract. ALLOCATION OF PURCHASE PAYMENTS A Purchase Payment is the portion of your Gross Purchase Payment which we invest in your contract after we deduct the sales charge. In order to issue your contract, we must receive your initial Gross Purchase Payment and all required paperwork in Good Order, including Purchase Payment allocation instructions at our Annuity Service Center. We will accept initial and subsequent Gross Purchase Payments by electronic transmission from certain broker-dealer firms. In connection with arrangements we have to transact business electronically, we may have agreements in place whereby your broker-dealer may be deemed our agent for receipt of your Gross Purchase Payments. Thus, if we have deemed a broker-dealer our agent, a Gross Purchase Payment received by the broker-dealer will be priced as if the Gross Purchase Payment was received by us. However, if a broker-dealer is not deemed our agent, a Gross Purchase Payment received by the broker-dealer will not be priced until it is received by us. You assume any risk in market fluctuations if you submit your Purchase Payment directly to a broker-dealer that is not deemed our agent, should there be a delay in that broker-dealer delivering your Purchase Payment to us. Please check with your financial representative to determine if his/her broker-dealer has an agreement with the Company that deems the broker-dealer an agent of the Company. An initial Purchase Payment will be priced within two NYSE business days after it is received by us in Good Order if the Gross Purchase Payment is received before Market Close. If the initial Gross Purchase Payment is received in Good Order after Market Close, the initial Purchase Payment will be priced within two NYSE business days after the next NYSE business day. We allocate your initial Purchase Payment as of the date such Purchase Payment is priced. If we do not have complete information necessary to issue your contract, we will contact you. If we do not have the information necessary to issue your contract within five NYSE business days, we will send your money back to you, or ask your permission to keep your money until we get the information necessary to issue the contract. Any subsequent Purchase Payment will be priced as of the day it is received by us in Good Order if the request is received before Market Close. If the subsequent Gross Purchase Payment is received in Good Order after Market Close, it will be priced as of the next NYSE business day. We invest your subsequent Purchase Payments in the Variable Portfolios and available Fixed Accounts according to any allocation instructions that accompany the subsequent Gross Purchase Payment. If we receive a Gross Purchase Payment without allocation instructions, we will invest the 8

13 Purchase Payment according to your allocation instructions on file. Please see INVESTMENT OPTIONS below. Gross Purchase Payments submitted by check can only be accepted by the Company at the Payment Center at the following address: American General Life Insurance Company Annuity Service Center P.O. Box Pasadena, CA Gross Purchase Payments sent to the Annuity Service Center will be forwarded and priced when received at the Payment Center. Overnight deliveries of Gross Purchase Payments can only be accepted at the following address: American General Life Insurance Company Annuity Service Center Building #6, Suite Media Center Drive Los Angeles, CA Delivery of Gross Purchase Payments to any other address will result in a delay in crediting your contract until the Gross Purchase Payment is received at the Payment Center. ACCUMULATION UNITS When you allocate a Purchase Payment to the Variable Portfolios, we credit your contract with Accumulation Units of the Separate Account. We base the number of Accumulation Units you receive on the unit value of the Variable Portfolio as of the day we process your Purchase Payment, as described under Allocation of Purchase Payments above, if before that day s Market Close, or on the next NYSE business day s unit value if we process your Purchase Payment after that day s Market Close. The value of an Accumulation Unit goes up and down based on the performance of the Variable Portfolios. We determine the value of each Accumulation Unit at the close of the NYSE every NYSE business day, by multiplying the Accumulation Unit value for the immediately preceding NYSE business day by a factor for the current NYSE business day. The factor is determined by: 1. dividing the net asset value per share of the Underlying Fund at the end of the current NYSE business day, plus any dividend or capital gains per share declared on behalf of the Underlying Fund as of that day, by the net asset value per share of the Underlying Fund for the previous NYSE business day; and 2. multiplying it by one minus all applicable daily asset based charges. We determine the number of Accumulation Units credited to your contract by dividing the Purchase Payment by the Accumulation Unit value for the specific Variable Portfolio. Example: We receive a $25,000 Gross Purchase Payment from you on Wednesday which you allocate to the Variable Portfolio A. After we deduct the sales charge, the net amount to be invested of your Gross Purchase Payment is $23, We determine that the value of an Accumulation Unit for the Variable Portfolio A is $11.10 when the NYSE closes on Wednesday. We then divide $23, by $11.10 and credit your contract on Wednesday night with 2, Accumulation Units for the Variable Portfolio A. Performance of the Variable Portfolios and the insurance charges under your contract affect Accumulation Unit values. These factors cause the value of your contract to go up and down. RIGHT TO EXAMINE You may cancel your contract within ten days after receiving it. We call this a free look. Your state may require a longer free look period. Please check your contract or with your financial representative. To cancel, you must mail the contract along with your written free look request to our Annuity Service Center at P.O. Box 15570, Amarillo, Texas If you decide to cancel your contract during the free look period, generally we will refund to you the value of your contract on the day we receive your request in Good Order at the Annuity Service Center plus any sales charges we deducted. The amount refunded may be more or less than the amount you originally invested. Certain states require us to return your Gross Purchase Payments upon a free look request. Additionally, all contracts issued as an IRA require the full return of Gross Purchase Payments upon a free look. If your contract was issued either in a state requiring return of Gross Purchase Payments or as an IRA, and you cancel your contract during the free look period, we return the greater of (1) your Gross Purchase Payments; or (2) the value of your contract on the day we receive your request in Good Order at the Annuity Service Center. With respect to these contracts, we reserve the right to put your money in a money market or similar portfolio during the free look period. If we place your money in a money market or similar portfolio during the free look period, we will allocate your money according to your instructions at the end of the applicable free look period. Please see the STATE CONTRACT AVAILABILITY AND/OR VARIABILITY Appendix for information about the free look period in your state. EXCHANGE OFFERS From time to time, we allow you to exchange an older variable annuity issued by the Company or one of its affiliates, for a newer product with different features and benefits issued by the Company or one of its affiliates. Such 9

14 an exchange offer will be made in accordance with applicable federal securities laws and state insurance rules and regulations. We will provide the specific terms and conditions of any such exchange offer at the time the offer is made. IMPORTANT INFORMATION FOR MILITARY SERVICEMEMBERS If you are an active duty full-time servicemember, and are considering the purchase of this contract, please read the following important information before investing. Subsidized life insurance is available to members of the Armed Forces from the Federal Government under the Servicemembers Group Life Insurance program (also referred to as SGLI ). More details may be obtained on-line at the following website: This contract is not offered or provided by the Federal Government and the Federal Government has in no way sanctioned, recommended, or encouraged the sale of this contract. No entity has received any referral fee or incentive compensation in connection with the offer or sale of this contract, unless that entity has a selling agreement with the Company. INVESTMENT OPTIONS VARIABLE PORTFOLIOS The Variable Portfolios invest in the Underlying Funds of the Trusts. Additional Variable Portfolios may be available in the future. The Variable Portfolios are only available through the purchase of certain insurance contracts we offer. The Underlying Funds offered through this contract are selected by us and we may consider various factors in the selection process, including but not limited to: asset class coverage, the strength of the investment adviser s or subadviser s reputation and tenure, brand recognition, performance and the capability and qualification of each investment firm. Another factor we may consider is whether the Underlying Fund or its service providers (i.e., the investment adviser and/or subadviser(s)) or their affiliates will make payments to us or our affiliates in connection with certain administrative, marketing and support services, or whether the Underlying Fund s service providers have affiliates that can provide marketing and distribution support for sales of the contract. Please see PAYMENTS IN CONNECTION WITH DISTRIBUTION OF THE CONTRACT below. We review the Underlying Funds periodically and may make changes if we determine that an Underlying Fund no longer satisfies one or more of the selection criteria and/or if the Underlying Fund has not attracted significant allocations from contract owners. We offer Underlying Funds of the Anchor Series Trust and SunAmerica Series Trust at least in part because they are managed by SunAmerica Asset Management, LLC ( SAAMCo ), a wholly-owned subsidiary of AGL. From time to time, certain Variable Portfolio names are changed. When we are notified of a name change, we will make changes so that the new name is properly shown. However, until we complete the changes, we may provide you with various forms, reports and confirmations that reflect a Variable Portfolio s prior name. You are responsible for allocating Purchase Payments to the Variable Portfolios as is appropriate for your own individual circumstances, investment goals, financial situation and risk tolerance. You should periodically review your allocations and values to ensure they continue to suit your needs. You bear the risk of any decline in contract value resulting from the performance of the Underlying Funds you have selected. In making your investment selections, you should investigate all information available to you including the Underlying Fund s prospectus, statement of additional information and annual and semi-annual reports. During periods of low short-term interest rates, and in part due to contract fees and expenses, the investment return of a money market or similar portfolio may become extremely low and possibly negative. In the case of negative returns, your investment in a money market or similar portfolio will lose value. The Trusts serve as the underlying investment vehicles for other variable annuity contracts issued by the Company and other affiliated and unaffiliated insurance companies. Neither the Company nor the Trusts believe that offering shares of the Trusts in this manner disadvantages you. The Trusts are monitored for potential conflicts. The Trusts may have other Underlying Funds, in addition to those listed here, that are not available for investment under this contract. We do not provide investment advice, nor do we recommend or endorse any particular Underlying Fund. The Underlying Funds along with their respective advisers are listed below. AIM Variable Insurance Funds (Invesco Variable Insurance Funds) Series II Shares Invesco Advisers, Inc. is the investment adviser to AIM Variable Insurance Funds (Invesco Variable Insurance Funds) ( AVIF ). American Funds Insurance Series Class 2 Shares Capital Research and Management Company is the investment adviser to American Funds Insurance Series ( AFIS ). Lord Abbett Series Fund, Inc. Class VC Shares Lord, Abbett & Co. LLC is the investment adviser to Lord Abbett Series Fund, Inc. ( LASF ). 10

15 SAAMCO MANAGED TRUSTS We offer Underlying Funds of the Anchor Series Trust and SunAmerica Series Trust (the SAAMCo Managed Trusts ) at least in part because they are managed by SunAmerica Asset Management, LLC ( SAAMCo ), an affiliate of the Company. SAAMCo engages subadvisers to provide investment advice for the Underlying Funds. The Company and/or its affiliates may be subject to certain conflicts of interest as the Company may derive greater revenues from Variable Portfolios offered by a Trust managed by an affiliate than certain other available Variable Portfolios. Anchor Series Trust Class 1 Shares SAAMCo is the investment adviser and various managers are the subadviser to Anchor Series Trust ( AST ). SunAmerica Series Trust Class 1 Shares SAAMCo is the investment adviser and various managers are the subadvisers to SunAmerica Series Trust ( SAST ). (Please see next page for full list of investment options) 11

16 Underlying Funds Managed by: Trust Asset Class Aggressive Growth Wells Capital Management Incorporated SAST STOCK American Funds Asset Allocation Capital Research and Management Company AFIS ASSET ALLOCATION American Funds Global Growth Capital Research and Management Company AFIS STOCK American Funds Growth Capital Research and Management Company AFIS STOCK American Funds Growth-Income Capital Research and Management Company AFIS STOCK Asset Allocation Edge Asset Management, Inc. AST ASSET ALLOCATION Balanced J.P. Morgan Investment Management Inc. SAST ASSET ALLOCATION Blue Chip Growth Massachusetts Financial Services Company SAST STOCK Capital Appreciation Wellington Management Company LLP AST STOCK Capital Growth The Boston Company Asset Management, LLC SAST STOCK Corporate Bond Federated Investment Management Company SAST BOND Dogs of Wall Street* SunAmerica Asset Management, LLC SAST STOCK Emerging Markets J.P. Morgan Investment Management Inc. SAST STOCK Equity Opportunities OppenheimerFunds, Inc. SAST STOCK Fundamental Growth Wells Capital Management Incorporated SAST STOCK Global Bond Goldman Sachs Asset Management International SAST BOND Global Equities J.P. Morgan Investment Management Inc. SAST STOCK Government and Quality Bond Wellington Management Company LLP AST BOND Growth Opportunities Invesco Advisers, Inc. SAST STOCK Growth Wellington Management Company LLP AST STOCK Growth-Income J.P. Morgan Investment Management Inc. SAST STOCK High-Yield Bond PineBridge Investments LLC SAST BOND International Diversified Equities Morgan Stanley Investment Management, Inc. SAST STOCK International Growth & Income Putnam Investment Management, LLC SAST STOCK Invesco V.I. American Franchise Fund, Series II Invesco Advisers, Inc. AVIF STOCK Shares* Invesco V.I. Comstock Fund, Series II Shares* Invesco Advisers, Inc. AVIF STOCK Invesco V.I. Growth and Income Fund, Series II Invesco Advisers, Inc. AVIF STOCK Shares Lord Abbett Growth and Income Lord, Abbett & Co. LLC LASF STOCK Lord Abbett Mid Cap Stock Lord, Abbett & Co. LLC LASF STOCK Mid-Cap Growth J.P. Morgan Investment Management Inc. SAST STOCK Real Estate FIAM LLC SAST STOCK SA AB Growth AllianceBernstein L.P. SAST STOCK SA JPMorgan MFS Core Bond J.P. Morgan Investment Management Inc. and SAST BOND Massachusetts Financial Services Company SA Legg Mason BW Large Cap Value Portfolio Brandywine Global Investment Management, LLC SAST STOCK SA MFS Massachusetts Investors Trust* Massachusetts Financial Services Company SAST STOCK SA MFS Total Return* Massachusetts Financial Services Company SAST ASSET ALLOCATION Technology Columbia Management Investment Advisers, LLC SAST STOCK Telecom Utility Massachusetts Financial Services Company SAST STOCK Ultra Short Bond Portfolio Dimensional Fund Advisors LP SAST BOND * Dogs of Wall Street is an equity fund seeking total return including capital appreciation and current income. Invesco V.I. American Franchise Fund is an equity fund seeking capital growth. Invesco V.I. Comstock Fund is an equity fund seeking capital growth and income. SA MFS Massachusetts Investors Trust is an equity fund seeking reasonable current income and long-term growth of capital and income. SA MFS Total Return is an equity fund seeking reasonable current income, long term capital growth and conservation of capital. You should read the prospectuses for the Trusts carefully. These prospectuses contain detailed information about the Underlying Funds, including each Underlying Fund s investment objective and risk factors. You may obtain an additional copy of these prospectuses for the Trusts by calling our Annuity Service Center at (800) or by visiting our website at You may also obtain information about the Underlying Funds (including a copy of the Statement of Additional Information) by accessing the U.S. Securities and Exchange Commission s website at 12